8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2015
KAR Auction Services, Inc.
(Exact name of Registrant as specified in its charter)
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| | | | |
Delaware | | 001-34568 | | 20-8744739 |
(State or other jurisdiction
of incorporation) | | (Commission File
Number) | | (I.R.S. Employer
Identification No.) |
13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032
(Address of principal executive offices)
(Zip Code)
(800) 923-3725
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 4, 2015, KAR Auction Services, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2015. KAR Auction Services, Inc. will host an earnings conference call and webcast, Thursday, November 5, 2015 at 11:00 a.m., Eastern Standard Time. The conference call may be accessed by calling 1-877-741-4248 and entering participant passcode 735791 and the live webcast may be accessed at the investor relations section of www.karauctionservices.com. The call will be hosted by KAR Auction Services, Inc. Chief Executive Officer and Chairman of the Board, Jim Hallett, and Executive Vice President and Chief Financial Officer, Eric Loughmiller. The call will feature a review of operating highlights and financial results for the three and nine months ended September 30, 2015. The press release dated November 4, 2015 is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference in its entirety.
On November 4, 2015, KAR Auction Services, Inc. also posted supplemental financial information for the three and nine months ended September 30, 2015, and Earnings Slides for the three months ended September 30, 2015. The supplemental financial information can be located at the investor relations section of www.karauctionservices.com under the quarterly results page and the Earnings Slides can be located at the investor relations section of www.karauctionservices.com under the investor presentations page. The supplemental financial information and Earnings Slides posted on November 4, 2015 are attached to this Current Report on Form 8-K as Exhibits 99.2 and 99.3, respectively, and are incorporated herein by reference in their entirety.
Within the Company's third quarter 2015 press release, related attachments thereto, the supplemental financial information and Earnings Slides, the Company makes reference to certain non-GAAP financial measures. The non-GAAP financial measures include the following: EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share, Operating Adjusted Net Income and Operating Adjusted Net Income Per Share. The Company has presented reconciling information along with the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) for each of the above non-GAAP financial measures in the press release, supplemental financial information and Earnings Slides. In addition, the Company’s reasons for presenting these non-GAAP financial measures are discussed below.
The Company believes that these measures represent important internal measures of performance. Accordingly, where these non-GAAP measures are provided, it is done so that investors have the same financial data that management uses with the belief that it will assist the investment community in properly assessing the underlying performance of the Company on a year-over-year and quarter-sequential basis. Investors should consider these non-GAAP measures in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. The specific reasons, in addition to the reasons described above, why the Company's management believes that the presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s results of operations are as follows:
EBITDA and Adjusted EBITDA – The Company’s management believes that EBITDA is a useful supplement and meaningful indicator of earnings performance to be used by its investors, financial analysts and others to analyze the Company’s financial performance and results of operations over time. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about
one of the principal measures of performance used by its creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate the performance of the Company. The most directly comparable financial performance measure calculated and presented in accordance with GAAP is net income (loss). A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2015 and 2014 is contained in the attachments to the press release. In addition, a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2015 and 2014, as well as each of the last four quarters and the twelve months ended September 30, 2015 is contained in the supplemental financial information. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the three months ended September 30, 2015 and 2014 is also contained in the Appendix to the Earnings Slides.
Adjusted Net Income and Adjusted Net Income Per Share – The Company’s management believes that adjusted net income and adjusted net income per share are useful supplements and meaningful indicators of earnings performance to be used by its investors, financial analysts and others to analyze the Company’s financial performance and results of operations over time. The revaluation of certain assets of the company, and resultant increase in depreciation and amortization expense which resulted from the 2007 merger, as well as stock-based compensation expense tied to the 2007 merger, have had a continuing effect on our reported results. Non-GAAP financial measures of adjusted net income and adjusted net income per share, in the opinion of the Company, provide comparability to other companies that may have not incurred these types of non-cash expenses. In addition, net income and net income per share have been adjusted for certain other charges. A reconciliation of net income (loss) and net income (loss) per share to adjusted net income and adjusted net income per share for the three and nine months ended September 30, 2015 and 2014 is contained in the attachments to the press release.
Operating Adjusted Net Income and Operating Adjusted Net Income Per Share – The Company’s management believes that operating adjusted net income and operating adjusted net income per share are useful supplements and meaningful indicators of earnings performance to be used by its investors, financial analysts and others to analyze the Company’s financial performance and results of operations over time. Amortization expense associated with acquired intangible assets, such as customer relationships, software, tradenames and noncompete agreements are not representative of ongoing capital expenditures, but have a continuing effect on our reported results. Non-GAAP financial measures of operating adjusted net income and operating adjusted net income per share, in the opinion of the Company, provide comparability to other companies that may not have incurred these types of non-cash expenses or that report a similar measure. In addition, net income and net income per share have been adjusted for certain other charges. A reconciliation of net income (loss) and net income (loss) per share to operating adjusted net income and operating adjusted net income per share for the three and nine months ended September 30, 2015 and 2014 is contained in the supplemental financial information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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99.1 | Press release dated November 4, 2015 – “KAR Auction Services, Inc. Reports Growth in Revenues, Adjusted EBITDA and Adjusted Net Income for Third Quarter 2015” |
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99.2 | KAR Auction Services, Inc. Q3 2015 Supplemental Financial Information – November 4, 2015 |
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99.3 | KAR Auction Services, Inc. Q3 2015 Earnings Slides – November 4, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: November 4, 2015 KAR Auction Services, Inc.
/s/ Eric M. Loughmiller
Eric M. Loughmiller
Executive Vice President and Chief Financial Officer